Brazil's first lady ‘upset President Xi's wife' by chiding TikTok
Her well-meaning attempt to bring up the issue of children addicted to TikTok received a frosty response from her Chinese opposite number, Xi's wife Peng Liyuan, it was later reported. A Chinese minister was also said to have been upset.
The controversy has now moved from China to Brazilian politics, where attention has focused on how the story was made known to newspapers. The chief suspect is Rui Costa, chief of staff to President Lula, who was present and whose wider role as
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Reuters
40 minutes ago
- Reuters
Trump opens door to sales of version of Nvidia's next-gen AI chips in China
Aug 11 (Reuters) - U.S. President Donald Trump on Monday suggested he might allow Nvidia (NVDA.O), opens new tab to sell a scaled-down version of its next-generation advanced GPU chip in China, despite deep-seated fears in Washington that China could harness American artificial intelligence capabilities to supercharge its military. Trump also confirmed and defended an agreement calling for U.S. AI chip giant Nvidia, led by Jensen Huang, and Advanced Micro Devices (AMD.O), opens new tab to give the U.S. government 15% of revenue from sales of some advanced computer chips in China, after his administration greenlit exports to China of less advanced AI chips known as the H20 last month. "Jensen also has the new chip, the Blackwell. A somewhat enhanced-in-a-negative-way Blackwell. In other words, take 30% to 50% off of it," Trump told reporters in an apparent reference to slashing the chip's capability. "I think he's coming to see me again about that, but that will be an unenhanced version of the big one," he added. Trump's administration halted sales of Nvidia's H20 chips to China in April, but the company said last month it had won clearance to resume shipments and hoped to start deliveries soon. "The H20 is obsolete," Trump said, saying China already had it. "So I said, 'Listen, I want 20% if I'm going to approve this for you, for the country'," he added. The deal is extremely rare for the U.S. and marks Trump's latest intervention in corporate decision-making, after pressuring executives to invest in American manufacturing and demanding new Intel CEO Lip-Bu Tan resign over ties to Chinese companies. Analysts said the levy may hit margins at the chipmakers and set a precedent for Washington to tax critical U.S. exports, potentially extending beyond semiconductors. The U.S. Commerce Department has started issuing licenses for the sale of H20 chips to China, another U.S. official said on Friday. Both the U.S. officials declined to be named because details have not been made public. The China curbs are expected to cost Nvidia and AMD billions of dollars in revenue, and successive U.S. administrations have sought in recent years to limit Beijing's access to cutting-edge chips that could bolster China's military. Washington does not feel the sale of H20 and equivalent chips compromises national security, said the first U.S. official. The official did not know when or how the agreement with the chip companies would be implemented, but said the administration would be in compliance with the law. The U.S. Constitution prohibits Congress from laying taxes and duties on articles exported from any state. The Export Clause applies to taxes and duties, not user fees. When asked if Nvidia had agreed to pay 15% of revenues to the U.S., a company spokesperson said: "We follow rules the U.S. government sets for our participation in worldwide markets." "While we haven't shipped H20 to China for months, we hope export control rules will let America compete in China and worldwide," the spokesperson added. A spokesperson for AMD said the U.S. approved its applications to export some AI processors to China, but did not directly address the revenue-sharing agreement and said the company's business adheres to all U.S. export controls. The Commerce Department did not immediately comment. China's foreign ministry said the country has repeatedly stated its position on U.S. chip exports. The ministry has previously accused Washington of using technology and trade measures to "maliciously contain and suppress China." The Financial Times, which first reported the development, said the chip firms agreed to the arrangement as a condition for obtaining the export licenses for their semiconductors, including AMD's MI308 chips. It added that the Trump administration had yet to determine how to use the money. "The Chinese market is significant for both these companies so even if they have to give up a bit of the money, they would otherwise make it look like a logical move on paper," AJ Bell investment director Russ Mould said. Still, analysts and experts questioned the logic of resuming sales if the chips could pose a national security risk. "Decisions on export licenses should be determined by national security considerations and the tradeoffs of U.S. policy goals, not a revenue-creating possibility," said Martin Chorzempa, senior fellow at the Peterson Institute for International Economics, an independent research institution. "What it ends up creating is an incentive to control things, to then extract a payment, rather than controlling things because we're actually concerned about the risk to national security." U.S. Commerce Secretary Howard Lutnick said last month the planned resumption of sales of the AI chips was part of U.S. negotiations with China to get rare earths and described the H20 as Nvidia's "fourth-best chip" in an interview with CNBC. He said it was in U.S. interests for Chinese firms to use American technology, even if the most advanced chips remained barred, to keep them on a U.S. "tech stack". Some elements of Trump's trade policy are already facing legal scrutiny, with a federal appeals panel skeptical of his claim that a 1977 law, traditionally used to sanction enemies or freeze assets, also empowered him to impose tariffs. "We aren't sure we like the precedent this sets," Bernstein analysts said of the revenue-share deal. "Will it stop with Chinese AI? Will it stop with controlled products? Will other companies be required to pay to sell into the region?" "It feels like a slippery slope to us." The analysts estimated the deal would cut gross margins on the China-bound processors by 5 to 15 percentage points, shaving about a point from Nvidia and AMD's overall margins. Nvidia generated $17 billion in revenue from China in the fiscal year ending January 26, representing 13% of total sales. AMD reported $6.2 billion in China revenue for 2024, accounting for 24% of total revenue. Nvidia has warned a China sales halt for H20 chips could cut $8 billion from July quarter revenue, while AMD has projected a $1.5 billion annual hit from the curbs.
Reuters
42 minutes ago
- Reuters
Breakingviews - Chip export taxes flunk fiscal and security tests
WASHINGTON, Aug 11 (Reuters Breakingviews) - When your signature legislative achievement raises the national debt by $3.4 trillion, skimming $3 billion from vital exports to your top geopolitical rival is a meager fix. In April, the United States banned exports to China of even cut-down chips used to train artificial intelligence on national security grounds. The Trump administration has now reversed itself, in exchange for a 15% cut of Nvidia (NVDA.O), opens new tab and AMD's (AMD.O), opens new tab sales to the People's Republic. It either makes sense to keep an adversary hooked to the U.S. supply chain or not; the case to accept risk in exchange for a minuscule contribution to public coffers emptied by a recent tax-cut package doesn't pass the smell test. Worse, it may set a precedent that whittles away at that bill's ostensible benefit to corporate America. The Trump administration's new arrangement reopens a big market for the primary U.S. designers of graphics processing units, the bedrock of AI development. Nvidia's H20 is the gold standard, outpacing alternatives thus far developed in China despite relying on generation-old technology. President Trump dismissed it as an obsolete chip that China already has. Judging by predicted demand, though, it's still a hot property. Bank of America analysts estimated that reopening exports could win Nvidia up to $10 billion in revenue from China in the next six months. Annualized, that implies $3 billion of levies, against an overall expected tax bill of $19 billion this year, according to Visible Alpha data. While CEO Jensen Huang can probably stomach the hit on this product – reusing aging tech is cheaper, after all – it's a big increase. For the U.S. Treasury, though, company-by-company needling is a terribly inefficient way to raise revenue. It follows a pattern of chasing small-ticket items, including $5 million immigration 'Gold Cards,' university settlements, and high tariffs meant to solve an array of geopolitical challenges, from Russian oil exports to the Brazilian judiciary. Commerce Secretary Howard Lutnick, opens new tab, too, has led an effort to charge for more government services. Even broad-based tariffs are insufficient to plug the fiscal gap, despite Trump's stated dream of replacing most taxes with duties. Sure, revenue from import levies has surged to over $100 billion so far in 2025. But the government spends about $7 trillion annually. This case is even worse, muddling any coherent security approach to AI proliferation and the dream of a competitive tax code to boot. If every trade flow that attracts political attention – whether into or out of the country – is subject to an ad hoc surcharge, efficiency goes out the window. The heavy hand of government is everywhere, even as tax revenue slips through its fingers. Follow Gabriel Rubin on Bluesky, opens new tab and LinkedIn, opens new tab.
Reuters
42 minutes ago
- Reuters
Brazil-US meeting canceled amid tariff dispute, says finance minister
SAO PAULO, Aug 11 (Reuters) - Brazil Finance Minister Fernando Haddad said on Monday that his virtual meeting with U.S. Treasury Secretary Scott Bessent had been canceled after initially being scheduled for Wednesday. That was a setback for the Brazilian government, which had hoped to use the meeting to negotiate tariffs after U.S. President Donald Trump's administration imposed 50% duties on several Brazilian goods. Speaking to GloboNews TV, Haddad said no new date had been set for the call, despite Brazil's request to reschedule it following the cancellation notice. The minister lamented that Brazil was not even able to sit at the table to negotiate tariffs with the United States and criticized what he called "pseudo-Brazilians" in Washington lobbying against their own country. The tariff hike was linked by the Trump administration to the trial of his right-wing ally, former President Jair Bolsonaro, who is facing charges over an alleged coup attempt following his 2022 electoral defeat. Congressman Eduardo Bolsonaro, Bolsonaro's son, has been in the U.S. since March, campaigning for sanctions against those responsible for the judicial proceedings. Haddad said Brazil will need to explore other markets more aggressively, highlighting Southeast Asia as a promising region and calling for urgent progress on a trade deal between South American bloc Mercosur and the European Union. The minister also said the government will soon issue an executive order to address the impact of higher U.S. tariffs. The package will include structural reforms to Brazil's export guarantee mechanisms through the Export Guarantee Fund (FGE). According to Haddad, the order will also support certain government purchases and credit measures, forming a multi-pronged response as there is no single solution for the roughly 10,000 companies affected.
